A. DamodaranIndian Institute of

Management Bangalore

Researching IP Implications on SMEs

WIPO Expert Group on Internationally Agreed Scope and Methodology for Undertaking National Surveys and/Studies on IP

and SMEs

SMEs in India: A Profile In India, SME sector is the second largest manpower

employer, after agricultureNearly 13 million units, employing 31 million peopleThe output from the SSI sector alone constitutes 40

percent share of the value added in the manufacturing sector

39% of country’s Industrial Production and 1/3rd of country’s exports

Very Traditional to High TechSource: MSME, Government of India

Policy Framework GOI enacted the Micro Small and Medium Enterprise Development

Act, 2006 to address issues of the sector GOI to do away with 24% ceiling prescribed for equity holdings in

MSME Expected Legislation on Limited Liability Partnership to encourage

corporatization of SME in India National Manufacturing Competitiveness Council (NMCC) was set up

to energize and sustain the growth of the manufacturing industry. New Promotional Packages for SMEs, and focus on development of

clusters. Steps to enhance access to equity and other funds from the markets for

SME’sSource: MSME, Government of India

Promotional Schemes of MSME

Revised strategy of lending and introduction of newer measures, such as the scheme to establish Small Enterprises Financial Centres (SEFC) for strategic alliance between branches of banks and SIDBI located in 388 clusters identified by ministry of SSI.

SME Fund of US$ 2.27 billion operationalised. Proposal for doubling the credit flow to MSME sector in next 5

Yrs.Promotion and financial support for Credit-cum-Performance

Rating in MSME sector in India, to facilitate greater and easier flow of credit from the banking sector to SMEs.

Guarantee coverage under Credit Guarantee Fund for Small Enterprises expanded substantially

Credit Linked Capital Subsidy Scheme for Technological Upgradation

Source: MSME, Government of India

PolicyNMCC has recommended a 5year programme for

enhancing competitiveness in SME’sProgramme aimed at improving awareness on IPR for

SME’sHopes to target 12000 units and 30 MSE clusters at a

target cost of 55 crores with a private contribution of 5 crores

Source: MSME, Government of India

Geographical Indications 1. Tea,West Bengal,Darjeeling Tea (word & logo)2. Handicrafts,Kerala,Aranmula Kannadi3. Textiles- Andhra Pradesh Pochampalli Ikat4. Textiles,Tamil Nadu, Salem Fabric5. Textiles, Madhya Pradesh, Chanderi Fabric6. Textiles, Maharashtra, Solapur Chaddar7. Textiles, Maharashtra,Solapur Terry Towel8. Textiles, Orrissa, Kotpad Handloom fabric9. Textiles,Karnataka,Mysore Silk10. Textiles,Rajasthan,Kota Doria

Geographical Indications11. Incense Sticks, Karnataka,Mysore Agarbathi12. Textiles, Tamil Nadu, Kancheepuram Silk13. Textiles, Carpets, Tamil Nadu, Bhavani Jamakkalam14. Textiles, Himachal Pradesh, Kullu Shawl15. Handicrafts, Karnataka, Bidriware16. Textiles, Tamil Nadu, Madurai Sungudi17. Textiles, Orissa, Orissa Ikat18. Handicrafts, Karnataka, Channapatna Toys & Dolls19. Handicrafts, Karnataka, Mysore Rosewood Inlay20. Tea, Himachal Pradesh, Kangra Tea

GIs21. Wet Grinder, Tamil Nadu, Coimbatore Wet Grinder22. Textiles, Andhra Pradesh, Srikalahasthi Kalamkari23. Essential Oil, Karnataka Mysore Sandalwood Oil24. Soap, Karnataka Mysore Sandal soap25. Embroidery (Textiles), Karnataka Kasuti Embroidery26. Paintings, Karnataka Mysore Traditional Paintings27. Horticulture Products, Karnataka Coorg Orange28. Horticulture Products, Karnataka, Mysore Betel leaf29. Horticulture Products, Karnataka Nanjanagud Banana30. Paintings, Bihar Madhubani Paintings

GIs31. Handicrafts, Andhra Pradesh, Kondapalli Bommallu32. Paintings, Tamil Nadu, Thanjavur Paintings33. Handicrafts, Andhra Pradesh, Silver Filigree of

Karimnagar34. Coir Products, Kerala, Alleppey Coir35. Textiles, Assam Muga Silk36. Handicrafts, Tamil Nadu, Temple Jewellery of Nagercoil37. Horticulture, Karnataka Mysore Jasmine38. Horticulture, Karnataka, Udupi Jasmine39. Horticulture, Karnataka, Hadagali Jasmine40. Agricultural Products,Kerala Navara Rice

GIs41. Agricultural Products, Kerala Palakkadan Matta Rice42. Handicrafts,Tamil Nadu,Thanjavur Art Plate43. Textiles, Karnataka Ilkal Sarees44. Handicrafts, Bihar Applique - Khatwa Patch Work of

Bihar45. Handicrafts, Bihar, Sujini Embroidery Work of Bihar46. Handicrafts, Bihar, Sikki Grass Work of Bihar47. Agricultural Products, Kerala Malabar Pepper48. Guava,Uttar Pradesh, Allahabad Surkha49. Textiles, New Delhi, Nakshi Kantha50. Handicrafts, Karnataka, Ganjifa cards of Mysore

(Karnataka)

GIs51. Textiles, Karnataka, Navalgund Durries52. Handicrafts,Karnataka,Karnataka Bronze Ware53. Textiles,Karnataka,Molakalmuru Sarees54. Coffee, Karnataka Monsooned Malabar Arabica Coffee55. Coffee Karnataka Monsooned Malabar Robusta Coffee56. Agricultural Products, Kerala Spices - Alleppey Green

Cardamom57. Agricultural Products, Karnataka Coorg Green Cardamom58. E. I. Leather, Tamil Nadu, E. I. Leather59. Textiles and Textile Goods, Tamil Nadu, Salem Silk60. Textiles and Textile Goods, Tamil Nadu, Kovai Cora Cotton61. Textiles and Textile Goods, Tamil Nadu, Arani Silk

Darjeeling Tea The first attempt on the part of the Tea Board of India towards

protection of the ‘Darjeeling’ brand was undertaken way back in 1983, when the ‘Darjeeling’ logo was created.

The Tea Board obtained home protection for the Darjeeling logo as a certification trade mark under the Indian Trade and Merchandise Marks Act 1958 (now the Trade Marks Act, 1999). The registration was granted in class 30 in the name of the Tea Board in 1986. In the same year, the logo was registered as a trademark in several other countries

In the absence of a separate law dedicated exclusively to GI’s in India during that time, the word ‘Darjeeling’ was also registered under the Trade and Merchandise Marks Act 1958 in class 30 in the name of Tea Board in 1998.

Source: Government of India

Knowledge Intensive SectorsBiotech including plant biotech , traditional

medicines and bioinformaticsIT SoftwareAgri-enterprises associated with export

based products

Innovation SystemsInformal – Protected as Trade Secrets or

Confidential InformationFormal – IPRs FiledWell Springs of InnovationStart up Innovation Firms: Vendor of

Innovations : BioinformaticsInnovations by Learning by doing FirmsCluster Generated Joint InnovationsPublic-Private Innovations

Typology of InnovationsDesignsNew ProcessesProductsDevices

Access To Patents: Transaction CostsPrior Art Data Base is Difficult to AccessPatent processes are too costly for SMEs to

accessTransaction Costs of Filing and Getting

Patents highPCT applications are excessively costly

Defending PatentsProbability of Infringement AssessmentCost of DefendingDamage Compensation

Self Assessment Capacity for Self Assessment of Innovation

Quality not thereSelf Assessment involves: - Determination of Quality of Innovation in

terms of Prior Art - The Depth of the Inventive Step - IPR-ability of the Innovation - Ramification of the Innovations in terms of

Applicability and Multiplier EffectsAssessment of Competitive Advantage

afforded by innovations

Standards and SMEsSMEs role in Standard setting very limitedCosts of Compliance with Standards highThis in turn affects Competitiveness

Business Models for Technology Transfer

Business Models that are appropriate to SMEs can facilitate transfer of technology and enable optimum revenue realization

This in turn can facilitate iinovationSuch Models have not been designed

Cluster InnovationsCluster based Innovations are economically

viable (by promising external economies) and achieve innovations that give greater leverage power to companies concerned

Cases to be documented

Research IssuesNew IP laws – like Petty PatentsTransaction Costs of filing and defending

Patents and other IPsCluster InnovationsEconomic Analysis of Business ModelsFinance early bird innovations that are

promisingFacilitate Self Assessments through

Capacity BuildingFinancial Mechanisms

Thank You